Trucking is a vital part of our economy, acting as the backbone that keeps goods moving from one place to another. Almost every product we use has traveled by truck at some point in its journey. Whether it's groceries, electronics, or machinery, trucks are essential for transporting these items across the country.
According to the Bureau of Labor Statistics, the median annual salary for heavy-duty truck drivers is $47,130, or about $22.66 per hour. In 2020, there were around two million heavy and tractor-trailer drivers in the U.S. The BLS predicts that the demand for truck drivers will grow by approximately 11% between 2020 and 2030, driven by economic expansion.
Many new drivers are concerned about job security due to the rise of autonomous trucking. While automation is becoming more common, it's unlikely to fully replace human drivers. Instead, it may change how work is done but not eliminate the need for skilled professionals. You can read more about this trend here.
The trucking industry isn't limited to just heavy-duty vehicles. It also includes light and medium-duty trucks, which serve different purposes such as local deliveries or short-haul routes. Not all drivers operate long-haul trucks, and this diversity offers various opportunities for entry into the field.
In 2021, the demand for truck drivers was high, and freight rates were strong. Many owner-operators found success in the current market, with many reporting good profits. Industry experts suggest that the high demand is due to a shortage of drivers, making new entrants highly sought after.
Source: DOT FMSCA
The trucking industry is highly fragmented, meaning that smaller operators make up a significant portion of the market. In fact, owner-operators account for about two-thirds of all carriers. This highlights the importance of small businesses in the sector.
Source: DOT FMSCA and Equipment Radar
According to Bob Costello, Chief Economist of the American Trucking Associations (ATA), trucks move roughly three-quarters of the nation’s freight by weight. While shipping by container ships is often the cheapest option, followed by rail, trucks are still widely used because most businesses don’t have direct access to ports or rail lines.
Freight often uses multiple modes of transport to reach its destination—like from a ship to a train to a truck. The choice depends on distance: shorter trips are usually better suited for trucks, while longer distances benefit from ships or rail.
Source: US Department of Transportation Bureau of Transportation Statistics
The Bureau of Transportation Statistics (BTS) Transportation Services Index (TSI) measures the volume of freight transportation services moved monthly by the for-hire transportation sector in the United States. It incorporates data from multiple carriers and is used by economists and industry experts to monitor overall demand for trucking.
Demand for trucking is cyclical, meaning it rises during economic growth and falls during downturns. Understanding these cycles is crucial for long-term planning and profitability.
Source: BTS
The cycle can be both your friend and foe. As a trucking business owner, you have little control over it. The economy fluctuates, and while it’s mostly stable, it can experience rough patches during recessions.
Freight rates often follow the economic cycle. They tend to rise when the economy is strong and fall during downturns. To run a successful and sustainable business, you should plan for these fluctuations. Consider what-if scenarios and adjust your business and expenses accordingly.
Source: DAT Flatbed Rates
Every great business starts with an idea. Most businesses begin small and grow if they have a solid plan and strategy. Jeff Bezos started Amazon in 1995 by shipping books from his garage.
When starting a business, you need three key elements to become successful:
Before starting your trucking business, creating a business plan is essential. A business plan is like a roadmap—it guides you from your initial idea to a successful operation. It helps you think through your goals and prepare for challenges.
A realistic business plan is important. Overly optimistic assumptions can lead to false confidence and potential setbacks. Your plan should be clear and useful for you, your bank, and any investors.
A business plan can range from a single page to dozens of pages. It acts as a blueprint for your success, similar to how athletes train before a game. Writing your plan forces you to think critically and get ready for the journey ahead.
Key components of a business plan include:
All long-haul truck drivers must have a commercial driver’s license (CDL). Requirements vary by state but typically involve passing written and driving tests. Some states may deny a CDL if you’ve had one suspended in another state.
Additional endorsements can be added to your CDL for specialized cargo, such as hazardous materials. These require additional testing and background checks.
Federal regulations require CDL drivers to maintain a clean record and pass a physical exam every two years. Random drug and alcohol testing is also required. Convictions for DUI or felony-related offenses can result in license suspension.
To operate legally, you must register your business with the FMCSA and obtain a DOT MC Authority Number. This number is used to track your compliance and safety records.
You must also complete the MCS-150 and Safety Certification Application. The FMCSA reviews your application and posts it for public comment for 10 business days.
After obtaining your DOT and MC numbers, register your company with the UCR. This ensures your insurance coverage is valid in all states you operate in.
The IRP license plate allows you to operate in the U.S. and most Canadian provinces. Annual fees are required to renew the plate.
Trucks weighing over 55,000 pounds must pay the Federal Excise Highway Tax. Complete Form 2290 annually with the IRS.
The IFTA permit allows your business to get one fuel license and file quarterly fuel tax returns in your registered state. Learn more about IFTA here.
Register an updated BOC-3 Form with the FMCSA. This designates a process agent for interstate operating authority.
Since 2017, the DOT requires ELDs to ensure compliance with federal hours of service regulations. Read more about the ELD mandate.
When starting a trucking business, consider two main categories: start-up costs and operating costs. Creating a spreadsheet or notebook to estimate these figures will help you understand your financial flow. Be realistic in your assumptions and include a buffer for unexpected expenses.
Start-up costs include purchasing a truck, making upgrades, registering your business, and paying for licenses and training. A truck is typically the largest expense. According to OOIDA, the average cost of a new truck is $140,000, while a used one is around $60,000.
Due to supply chain issues, new trucks are harder to find, and used trucks have become more expensive. However, many banks and manufacturers offer financing options, allowing you to buy a truck with little or no down payment.
Most jobs pay based on the miles you drive. Calculate your revenue by multiplying your rate per mile by the number of miles you plan to drive each week.
Hours of Service regulations limit how long you can drive, affecting your total mileage. Also, deadhead mileage—miles you drive without being paid—can impact your profitability.
Operating costs include fuel, maintenance, tires, tolls, meals, insurance, lodging, and accounting. Fuel is usually the biggest expense, with newer trucks being more fuel-efficient.
Maintenance costs increase as trucks age, especially after five years. You should also consider working capital—the difference between when you spend money and when you get paid.
Not all customers will pay on time, so factor in bad debt expenses. Larger companies tend to pay reliably, while smaller ones may pose a higher risk.
According to OOIDA’s 2020 survey, the average owner-operator earns $190,000, drives 121,000 miles (with 26,000 deadhead miles), and spends $124,500, leaving a net profit of $65,500.
Expenses include fuel ($42,865), maintenance ($21,000), tires ($5,000), and tolls ($3,000).
Remember, taxes will reduce your take-home pay. However, you can write off depreciation on your truck to lower your taxable income.
Unexpected events can happen at any time, such as accidents, downtime, or changes in fuel prices. Always build in a budget cushion to cover these situations.
Having proper insurance is also crucial. It protects your business from financial loss and increases your chances of long-term survival.
Aim to have three to six months of operating expenses saved up. Speak with your insurance provider to ensure you’re covered for a wide range of risks.
Yes, it's possible to start a trucking business with no upfront money. However, you’ll still need a source of funds for start-up and operating costs. Options include loans from friends, family, or banks.
You can finance your truck purchase or lease one. Dealerships will evaluate your credit history and business plan before offering financing or leasing options.
Always keep in mind that your business will need extra capital for unexpected expenses and daily operations.
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Starting A Successful Trucking Business Is Possible For Everybody
FMSCA Trucking Industry Registration Statistics
Trucking Industry By Carrier Size
Takeaway: Small owner-operators make up about two-thirds of the trucking industry.
Transportation Industry Statistics
Transportation Value Shipped By Modes & Mileage
Takeaway: Trucking (yellow) is the primary method that goods are shipped in the United States. Trucking represents 80% of goods shipped under 100 miles, and 50% of goods shipped between 1,500 and 2,000 miles. Data are as of 2018.
Transportation Services Index
Takeaway: Transportation Services Index follows the general path of GDP and the broader economy. It is cyclical and has ups and downs.
Be Aware Of The Cycle
Takeaway: Freight rates have climbed over 25% in the past year as the economy rebounded. Data are through August 2021.
Getting Started With Only One Truck
Create A Business Plan
Getting Your Commercial Driver’s License
Other Legal Requirements & Regulations
US DOT Motor Carrier (MC) Authority Number
Unified Carrier Registration (UCR)
International Registration Plan (IRP) License Plate
Heavy Highway Use Tax Return (Form 2290)
International Fuel Tax Agreement (IFTA) Permit
BOC-3 Form
Electronic Logging Devices (ELD)
Understanding Start-Up Costs and Operating Profit / Expenses Of Trucking Businesses
Start-Up Costs
Revenue
Operating Costs
Average Industry Numbers
Importance Of Having A Budget Cushion
Can I Start My Business With No Money?
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